Since 1902

Cry about Ugandan sugar import is hypocritical

Sometimes in 2000, the late burly Agriculture minister William Odongo Omamo, aka Kalieny (The Elephant), spoke at a function presided over by then President Daniel Arap Moi at Chemelil Sugar Company.

“Your Excellency, the Luo like water, they swim and bathe in rivers and lakes, they live by the side of water sources and that is why they are called River and Lake Nilotes. They eat from the lake. They are tall, black and proud of their heritage.”

“But there is one thing they know from their experiences with water and fish; the big fish feed on the smaller fish. Please Your Excellency do not allow the big sugar factories to swallow the small ones.”

The crowd urged him on because he was strumming the string of populism on the political guitar, which in effect defies the logic of economies of scale and business viability. You see, the proposal given by experts then was that some factories in one catchment (or harvest area) had to be closed and the remaining few modernised, expanded and improved.

Now, to see the sense in this, consider that Muhuroni, Miwani, Kibos and Chemelil Sugar factories are located within a 40km-radius. So what do you have? Old, decaying machinery; smoky, rickety tractors; demotivated, underpaid staff whose specialisation could be cheating on the supply of cane at the gate and theft of spares and other parts; exploited and dejected farmers who sell the farm inputs they are given on loan by the firms so as to raise fees, settle medical fees, or go to town to carouse and commit a few more sins.

Now, multiply this by the number of factories set up within a distance that one’s nose can pick the scent of ugali being cooked in the other kitchen and you have a rough understanding of what Dr Omamo and all Nyanza and Western politicians advocate for. Their language is that, “I will revitalise your sugar factory and put up more!”

That is why thereafter, there were calls for a new sugar factory in Busia and somewhere in Kericho. Then you have Nzoia, Butali, Sony, Mumias, and West Kenya all within ‘smelling’ distance of each other.

Now let me clarify something here. I have deliberately lumped up publicly-owned sugar companies like Miwani and Muhoroni and the private ones like Kibos and Butali because they compete with each other in a given zone.

So on economies of scale, they both serve to reinforce our point that we must rethink our strategy on the sugar sub-sector, otherwise we shall continue to spread our resources thin, amplify the inefficiencies of our systems, and continue paying the farmers and the workers poorly.

But because the farmer and the worker are voters, our politicians don’t care the illogical arrangement of opening more and more factories as if they are posho mills, all in the name of development. However, three problems arise from this arrangement; first the sugar-cane growers in these zones are largely small-scale, so even in the production of the crop, they do not enjoy the economies of scale.

Secondly, most of the sugar firms are public, meaning they are poorly run, as most public entities are, given the affliction of rabid corruption.

Thirdly, the political animal gets an entry and its greed cannot be satiated, and the only game they know how to play is neither golf nor football, but ‘licking’ sugar crystals and the art of wiping the lips clean so there is no evidence of it.

Now, the situation is compounded by politicians, some of whom refused to listen to President Uhuru Kenyatta yesterday on his sugar-milk-meat deal with Ugandan President Yoweri Museveni. They use the factories as objects of extortion; either for the management to employ their kin (voters) or to be given sugar on credit and at discounted rates, to go and sell. They also want to determine who runs them and who supplies what to those factories, which in effect makes them social and welfare vehicles rather than business enterprises.

The worst attack again by the politically well-connected is the creation of artificial shortages, such as the closure of (public) factories for maintenance all at the same time, and thereby giving room for overnight millionaires to import cheap sugar and dump it in the market.

Our situation gets worse because at the same time, we want to play in and dominate the Comesa and East African Community market, meaning flooding it with our produce, but we do not want those who have perfected their production by eliminating corruption and other deficiencies, to venture into ours.

Now guys, this is not to say Mr Kenyatta is right or wrong on the deal with Mr Museveni; it is to ask the hard question, which is, are the hands of those shouting from the roof tops clean?

For example, how is it that Mumias Sugar got a Sh1 billion bailout, but then it owes Kenya Power Company Sh1 billion in unpaid bills?

It is because our sugar sector is a study in mismanagement and misplaced priorities and if we do not diversify or change tack, imported sugar will continue to attract the corrupt and the holy just like a lamp does moths.